The proposal to convert the Bombay University into a for-profit organisation and to list its shares is fraught with dangerous consequences. The university is an autonomous, regulatory body endowed with vast powers. The governing structure of the university is entirely different from that of a listed corporate entity.
It has a senate, which is like a legislature elected by graduates, teachers, principals and managements of affiliated colleges and institutes laying down the policies; a syndicate elected by the senate from among its members meeting regularly to review and monitor implementation of the policies; a Vice-Chancellor, who is the CEO of the university, and professors of eminence heading various faculties, mostly drawn from the academic world.
On the other hand, the driving force for a listed company is profit - the interests of shareholders dominate those of other stakeholders.
A listed company is no doubt required to adhere to corporate governance and provisions in various statutes, transparency in operations, and so on. Corporate governance in this country is more a myth than a reality. Do we need universities to function this way?
There is already a slow erosion of values in privately-run educational institutions. Recently, the Karnataka high court observed that "with the involvement of politicians, the running of schools has become a business now. Such unscrupulous managements should be dealt with firmly."
No state-funded conventional university anywhere in the world is listed. Some like the Apollo Group, Career Education and Strayer Education in the US that are listed are not full-fledged universities like Harvard and Stanford.
These are doing online courses for students above the age of 30, mostly offering distance learning. Once a university becomes a listed company, vested interests would undoubtedly try to take control of its management.
To enable a university in Maharashtra to be listed, the Bombay University Act, 1953, the Maharashtra Universities Act, 1994 and even the Indian Universities Act need to be amended.
It is rather surprising that the Bombay University could entrust the feasibility study of going public, and also appoint Deutsche Bank as the lead manager to undertake the study involving such a major structural change in its constitution without consulting the Maharashtra government and its own Chancellor, the Governor of Maharashtra.
One understands the financial crunch universities in Maharashtra are facing. But there are other ways of augmenting the resources of the universities.
First, a prestigious institution like the Bombay University can take donations from some of the several prosperous enterprises in Mumbai. Besides, several millionaire doctors and lawyers of Mumbai, who have been its students, can donate generously, as was done earlier by eminent alumni like Cowasjee Jehanghir and Sir Premchand Roychand, the latter gifting the monumental Rajabhai Tower to the university.
The Bombay Stock Exchange (BSE) can not only donate munificently but also fund chairs on the capital market and allied subjects like corporate governance, business ethics, and so on. It is worth recalling that donors of several universities abroad are their own old students.
Media mogul John Kluge, an old boy of Columbia University, recently donated $400 million to his alma mater. The IITs have been generously funded by their alumni. Secondly, there can be an educational cess the Maharashtra government can be prevailed upon to impose on its taxes to fund the educational needs of the state, a part of which can go to universities.
Thirdly, the Bombay University can float bonds on the lines of what two universities in Singapore did recently.
Finally, a part, say 10 per cent, of the Rs 100 crore-plus surplus fund of the Bombay University can be deployed, with expert professional advice, in stock market instruments on the lines of what pension funds propose to do.
The author is a former BSE executive director
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